Special Overtime and “Room and Board” Rules Apply

On our article “Caring for Caregivers,” a recent visitor to our website asked: “How much is housing and meal value [in my area] for a private household worker under California Wage Order 15?” As in every area of employment law, the answer of course depends on the circumstances.

California regulates the wages and hours of workers through a series of 17 “Wage Orders,” published by the Industrial Welfare Commission (IWC). An employer must know which of these Wage Orders applies to its particular business or its particular types of employees. For instance, Wage Order 1 covers most manufacturing companies, Wage Order 2 covers “personal service” companies (e.g., beauty salons, health clubs), and Wage Order 4 covers most “white collar” office workers. An IWC pamphlet, available on-line and current to 2013, provides detailed descriptions of all such orders.

Wage Order 15 covers employees engaged in so-called “household occupations,” services related to the care of people or premises in a private household. These include housekeepers, cooks, and home caregivers.

Employing such workers involves special rules not present in most other industries, in part complicated by whether the worker is “live-in” or “non-live-in.” See the “Caring for Caregivers” article for more of the requirements.

When Live-In Household Workers Must be Paid Overtime, Special Rules: Wage Order 15 specifies household workers who reside on the employer’s premises for at least 120 hours per week or spend five consecutive days or nights per week residing on the employer’s premises are normally exempt from overtime requirements (but not minimum wage).

However, Wage Order 15 also requires employers provide live-in employees at least 12 hours free of duty each day, with an additional three or more hours free during each 12-hour work span. Live-in employees that work during such free hours are entitled to overtime at 1.5x times their regular rate of pay. (For calculating “regular rate,” see our blog “Working Overtime in California.”

Wage Order 15 also specifies that when a live-in employee works more than five days in any one workweek without a day off of not less than 24 consecutive hours (except in specially defined emergencies), the employer must pay overtime at 1.5x regular rate up through nine hours worked in the sixth and seventh days and 2.0x regular rate for any hours worked over nine in the sixth and seventh days.

Wage Order 15 specifies different overtime rules for non-live-in household workers, akin to the daily and weekly overtime rules for workers in many other industries. Again, see, “Working Overtime in California.”

Room and Board for Household Workers: An employer and household worker may agree in writing to satisfy at least a portion of the minimum wage requirement by crediting the value of meals and lodging the employer provides to that employee.

However, the employer may not set a “market value” for such credits but must follow the specific chart provided in Wage Order 15. For lodging, the credits may not be more than:

• $31.75/week for a room occupied alone;
• $26.20/week for a shared room;
• $381.20/month or two-thirds of the “ordinary rental value”/month for an apartment, whichever is less; and
• where the employer employs a couple, $563.90/month or two-thirds of the “ordinary rental value”/month for an apartment, whichever is less.

If the employer utilizes the “two-thirds ordinary rental value” measurement for the value of lodging, this could of course vary depending on where the live-in arrangement is located. Such employer would thus have to take care to document the basis of its calculations, including current consumer price index rates for comparable housing. Of course, just paying the $381.20/month or $563.90/month would be the safer avenue, even if those levels happened to exceed the applicable “two-thirds ordinary rental value.”

Under Wage Order 15, the meal credits may not be more than:

• $2.45 for breakfast;
• $3.35 for lunch; and
• $4.50 for dinner.

The definitions and rules for household workers in California have many other aspects.Our firm’s attorneys Tim Bowles or Cindy Bamforth can assist employers with such questions or issues.